Coming up next: ObamaCare taxes and fees

posted at 11:31 am on December 26, 2013 by Ed Morrissey

This reminder from the New York Post came on Christmas, when few paid attention, but it’s worth noting today. The disastrous rollout of ObamaCare is only the appetizer for Americans, the 2013 lead-in to higher costs and fees built into the so-called Affordable Care Act. What most people haven’t heard — yet — is the new fees that ObamaCare charges for access to those higher premiums:

The cost of President Obama’s massive health-care law will hit Americans in 2014 as new taxes pile up on their insurance premiums and on their income-tax bills.

Most insurers aren’t advertising the ObamaCare taxes that are added on to premiums, opting instead to discretely pass them on to customers while quietly lobbying lawmakers for a break.

But one insurance company, Blue Cross Blue Shield of Alabama, laid bare the taxes on its bills with a separate line item for “Affordable Care Act Fees and Taxes.”

The new taxes on one customer’s bill added up to $23.14 a month, or $277.68 annually, according to Kaiser Health News. It boosted the monthly premium from $322.26 to $345.40 for that individual.

These “fees” will add up to a considerable hike, as the Post notes. They include a 2% fee on the plans themselves for consumers, which will eventually raise $14.3 billion a year for the federal government. Insurers are paying a 3.5% fee for participating in the exchange, a cost to the risk pool that will get transferred — as all risk-pool expenses do — to the consumers in the form of higher premiums. The medical-device tax has long been debated, and will also get passed to the consumer.

It’s going to cost consumers at tax time, too. Remember when you could deduct all of your medical expenses if they exceeded the normal threshold for itemization?

Americans are currently allowed to deduct expenses that exceed 7.5 percent of their annual income. The threshold jumps to 10 percent under ObamaCare, costing taxpayers about $15 billion over 10 years.

That means that consumers will pay more for their medical care than ever, thanks to the tax limitation.

That’s nothing new about ObamaCare, though. We’ve been pointing out for years that this is just a wealth-transfer system, not a cost-containment system. It manipulates price to disguise the increased costs, but those are becoming more and more apparent, as USA Today reports today in a piece about the lack of choice for middle-class consumers throughout the country (via David Frum on Twitter):

Those making more than 400% of the federal poverty limit — $47,780 for an individual or $61,496 for a couple — are ineligible for subsidies to buy insurance.

The USA TODAY analysis looked at whether premiums for the least expensive plan in any of the metal levels was more than 8% of household income. That’s similar to the affordability test used by the federal government to determine whether premiums are so expensive consumers aren’t required to buy plans under the Affordable Care Act.

The number of people who earn close to the subsidy cutoff and are priced out of affordable coverage may be a small slice of the estimated 4.4 million people buying their own insurance and ineligible for subsidies. But the analysis clearly shows how the sticker shock hitting many in the middle class, including the self-employed and early retirees, isn’t just a perception problem. The lack of counties with affordable plans means many middle-class people will either opt out of insurance or pay too much to buy it.

The prices of exchange plans have shocked many shoppers, especially those who had plans canceled because they did not meet the ACA coverage requirements. But experts are not surprised.

“The ACA was not designed to reduce costs or, the law’s name notwithstanding, to make health insurance coverage affordable for the vast majority of Americans,” says health care consultant Kip Piper, a former government and insurance industry official. “The law uses taxpayer dollars to lower costs for the low-income uninsured but it also increases costs overall and shifts costs within the marketplace.”

Of course that’s what it is. David points out how the middle class gets hammered:

ACA taxes were imposed only high-income people. But large costs fall on middle class too, in the hidden, kludgey form of rate hikes (5)

It got sold as a system that bent the cost curve downward, but it only does that with effective price, and only for those who get subsidies. Everyone else gets shafted in the sharp premium hikes and added fees. That’s why 2014 will be a disaster for Democrats, as middle-class voters start figuring it out through their pocketbooks and tax returns.

What I like is that I can access the D.C. exchange in twenty different languages, including Apache, Navajo, and Irish. Which is great because I see so many Irish here who have a heck of a time assimilating, what with the fact that they only speak Irish and not the King’s English. (You can also receive notices in American Sign Language—l’d make a joke here but I might offend the deaf. But I guess since they can’t read and need American Sign Language I might as well let one rip. But I’ll refrain nevertheless.)

Maybe we should blame the federal government for this, but last time I looked (and at one point it was my job to do so) a government entity was only responsible for providing assistance in a foreign language if there was a significant number of people who spoke that language and had no facility with English. Of course, we can all quibble about what “significant” means in this context, but does anyone believe that it is at all conceivable that there are even ten people in the District who speak only Apache and need to buy their own health insurance? I would bet my entire net wealth that the number is, in fact, lower than that, if not zero. Ditto for Navajo and Irish. If there’s anyone in D.C. shopping for health insurance who speaks only German or French and no English I’d be shocked as well.

But while the exchange doesn’t work, at least we can get our messages telling us our application has been “disposed of” in the language of our choice, although to be honest I do not know at all what this message means and English is my mother tongue. Does it mean that I have insurance? I doubt that since I never got to select a plan. Or that I’ve been approved to buy a plan? if so why won’t it let me do so.

Blowback

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All government, in its essence, is a conspiracy against the superior man: its one permanent object is to oppress him and cripple him. If it be aristocratic in organization, then it seeks to protect the man who is superior only in law against the man who is superior in fact; if it be democratic, then it seeks to protect the man who is inferior in every way against both. One of its primary functions is to regiment men by force, to make them as much alike as possible and as dependent upon one another as possible, to search out and combat originality among them. All it can see in an original idea is potential change, and hence an invasion of its prerogatives. The most dangerous man to any government is the man who is able to think things out for himself, without regard to the prevailing superstitions and taboos. Almost inevitably he comes to the conclusion that the government he lives under is dishonest, insane and intolerable, and so, if he is romantic, he tries to change it. And even if he is not romantic personally he is very apt to spread discontent among those who are.

When the article itself has such an obvious problem, it seems appropriate to point it out.

WitchDoctor on December 26, 2013 at 11:43 AM

Yup, agreed. It’s a bit more effective to drop us a note in the tips line, too — sometimes we catch up to the comment far too late to make a change before most people have read it. Either or both are fine, though. I do appreciate it.

If only Congressional Republicans had had the opportunity to repeal Obamacare. Maybe in some sort of a showdown. It probably would not have worked but I’d rather they had shown some spine instead of attacking those who were pointing out what a bad idea all of this was. Damn you to hell Boehner, McConnell and all you surrender weasels.

They built Obamacare with a bunch of people who were unable to speak to one another. Then, when it came together, the builders declared it to be perfect with just a few “glitches.” There is no greater unity among Obamacare supporters than when somebody is critical of the scheme. Like telling parents that their kid’s ears are too big for his head.

I put this on the other thread where nonpartison is getting a beating, but I think most have moved on from there. Anyone heard of this situation?

A friend of mine who is married with 4 kids just told me on Christmas Eve that she was trying to get their insurance squared away. He is a farmer and she is a contract employee working from home. As of right now, he is able to buy insurance from the exchange, but she and the 4 kids are supposed to get Medicaid, with the state making the final determination if they really are going to be split up like that or not.

Has anyone else heard of this situation, where one family gets split up like this?

All of this rack and ruin is a great opportunity for those of us on the right, if we seize the day! Here is a terrific WSJ Opinion piece today.

Just imagine if we had an Apple, Google and Amazon competing to provide health care! The innovation, the value, the convenience and quality could be without limit if we empower consumers to shop and suppliers compete for their business.

Doesn’t matter. The GOP will NEVER repeal it. Even if they get their precious Senate majority. In fact, ESPECIALLY if they get their majority. Those of you who think salvation is coming with a 2014 tsunami — sorry. Nothing changes until you get rid of McConnell and the rest of the RINO bed-wetters. That is, until the GOP is completely reconstituted. Or it is driven into oblivion by another party.

I hate the whole “revenue neutral” thing. It starts with the assumption that what the government takes in now is somehow sacred and can never be decreased. If a bill is “revenue neutral,” it is spending too much money. Bills need to DECREASE revenue.

A friend of mine who is married with 4 kids just told me on Christmas Eve that she was trying to get their insurance squared away. He is a farmer and she is a contract employee working from home. As of right now, he is able to buy insurance from the exchange, but she and the 4 kids are supposed to get Medicaid, with the state making the final determination if they really are going to be split up like that or not.

Has anyone else heard of this situation, where one family gets split up like this?

cptacek on December 26, 2013 at 12:01 PM

Yes,this situation has been brought up before. I don’t know how accurate it is. I have also seen kids covered under Medicaid separately. I believe dialysis patients can get Medicaid coverage separately from the rest of the family. Part of the problem is that Obama has unilaterally changed the rules in questionably legal form 14 times in 3 months. My suggestion would be to try to get the Medicaid plan if there don’t seem to be other options available.

In my area, some of the hospitals have staff trained as navigators. As they are employed by the hospital, they are screened (not felons). If something like that is available in their area (it would vary by state-try to find a hospital within the state that offers support) they could try to use that resource.

Unfortunately, probably no one truly can give a definitive answer in some situations because the answer keeps changing at whim.

I wish them the best of luck.

I have the greatest familiarity with the DE, PA, MD and NJ markets if they have a specific question about someone they could contact in those areas.

The new taxes on one customer’s bill added up to $23.14 a month, or $277.68 annually, according to Kaiser Health News. It boosted the monthly premium from $322.26 to $345.40 for that individual.

These “fees” will add up to a considerable hike, as the Post notes. They include a 2% fee on the plans themselves for consumers, which will eventually raise $14.3 billion a year for the federal government. Insurers are paying a 3.5% fee for participating in the exchange, a cost to the risk pool that will get transferred — as all risk-pool expenses do — to the consumers in the form of higher premiums.

Plus if the taxes are based on a percentage and insurance will necessarily skyrocket due to low coverage, that means by 2014/2015, one can expect to see taxes on the same sample policy jump to $400~$500/year.

This is awesome, the government forces you to buy a product and then taxes you on the product they forced you to buy.

Bishop on December 26, 2013 at 11:37 AM

You get taxed on what you buy, and if you try to avoid the tax by not buying it, then they’ll tax you for that, too. Taxed if you do, taxed if you don’t. Then there’s having to pay inflated premiums for plans with unwanted/ unneeded features, and doctors leaving the profession leading to a decline in availability and quality of care. It’s a nightmare with no escape or end in sight.

But while the exchange doesn’t work, at least we can get our messages telling us our application has been “disposed of” in the language of our choice, although to be honest I do not know at all what this message means and English is my mother tongue. Does it mean that I have insurance? I doubt that since I never got to select a plan. Or that I’ve been approved to buy a plan? if so why won’t it let me do so.

What it means is that you’ve been counted as having “signed up” for Obamacre. And really that’s all that counts. You actually getting insurance coverage is a secondary concern, at best.

Doesn’t matter. The GOP will NEVER repeal it. Even if they get their precious Senate majority. In fact, ESPECIALLY if they get their majority. Those of you who think salvation is coming with a 2014 tsunami — sorry. Nothing changes until you get rid of McConnell and the rest of the RINO bed-wetters. That is, until the GOP is completely reconstituted. Or it is driven into oblivion by another party.

A friend of mine who is married with 4 kids just told me on Christmas Eve that she was trying to get their insurance squared away. He is a farmer and she is a contract employee working from home. As of right now, he is able to buy insurance from the exchange, but she and the 4 kids are supposed to get Medicaid, with the state making the final determination if they really are going to be split up like that or not.

Has anyone else heard of this situation, where one family gets split up like this?

cptacek on December 26, 2013 at 12:01 PM

Just asked husband who is also a physician who has heard of kids being on Medicaid separately but his initial response was, Who knows? It depends on what Obam’s golf score is for the day.

Seriously….”if” the GOP can take the Senate and keep the House next year…can they fix this? I know the GOP had a few alternate plans that never made it to the Senate floor but anything has to be better than what’s currently being forced on the producers in this country.

This isn’t even funny to watch anymore. I’m way beyond contempt for the people pushing this.

It’s not supposed to ‘work’ in any traditional sense of the meaning of the word. The ACA was never intended to ‘fix’ or address any of the challenges that we are facing within the healthcare industry. It’s spun as a ‘fix’ – but the ACA is little more than a massive leap into the progressive-fascist agenda where the federal government seizes 1/6th of the national economy and massively expands taxation in order to facilitate even more wealth redistribution in the name of ‘fairness’ and ‘social justice’.

As much as the Administration and their sycophants what the people to believe that the only real challenges are the one’s related to the fubar’ed websites, the entire bill remains little more than a disaster that will expose itself in stages as each day / month passes.

This is because the President and all those in favor of this EpicClusterFark utterly and completely lied about virtually every aspect of the bill in order to get it enacted.

It’s a lesson – as the exact same dishonesty, mendacity, and fecklessness is at work in ‘immigration reform’ and all other types of ‘reform’ being pushed by the Administration.

Doesn’t matter. The GOP will NEVER repeal it. Even if they get their precious Senate majority. In fact, ESPECIALLY if they get their majority. Those of you who think salvation is coming with a 2014 tsunami — sorry. Nothing changes until you get rid of McConnell and the rest of the RINO bed-wetters. That is, until the GOP is completely reconstituted. Or it is driven into oblivion by another party.

rrpjr on December 26, 2013 at 12:16 PM

Agreed , and Mr Speaker goes out with the bath water !
I write , I call almost every day . Yes a feeble army of one .
Sure , I know they don’t read what I write probably some
staffer does . But imagine if millions of other semi literate
folks did the same .
Someday we’ll go from words to pitchforks in 10 seconds flat !

It’s not supposed to ‘work’ in any traditional sense of the meaning of the word. The ACA was never intended to ‘fix’ or address any of the challenges that we are facing within the healthcare industry. It’s spun as a ‘fix’ – but the ACA is little more than a massive leap into the progressive-fascist agenda where the federal government seizes 1/6th of the national economy and massively expands taxation in order to facilitate even more wealth redistribution in the name of ‘fairness’ and ‘social justice’.

As much as the Administration and their sycophants what the people to believe that the only real challenges are the one’s related to the fubar’ed websites, the entire bill remains little more than a disaster that will expose itself in stages as each day / month passes.

This is because the President and all those in favor of this EpicClusterFark utterly and completely lied about virtually every aspect of the bill in order to get it enacted.

It’s a lesson – as the exact same dishonesty, mendacity, and fecklessness is at work in ‘immigration reform’ and all other types of ‘reform’ being pushed by the Administration.

Athos on December 26, 2013 at 12:31 PM

I agree totally. Once upon a time, Ed could be counted on to totally fisk the lies and spins. Here, he lets the $14.3 billion claim go by uncontested.

Sorta like when HotGas Pundits reguritate the “shutdown” claim when it actually was a temporary 17% slimdown. Or when they concur with CWCL (Conventional Lies) that we could go into default, when the truth is as long as the Govt prioritizes and continues to pay debts, there is no default if the debt ceiling isn’t raised or even lowered. it just means some pet projects won’t get funded.

There’s a new reality show here for the asking. Just set up a few thousand cameras in the homes of working people who were stupid enough to actually vote for Obama. Then film them as they open up their bills and see these new increases. First they’ll be confusion, and then we’ll get the money-shot as the realization that they’re going to have to actually pick up the bill for this atrocity dawns on their smug, self-satisfied faces.

There’s enough abuses by the elites on both sides of the aisle to write up a new Declaration of Independence based on just the abuses of the last 40 years:

When in the Course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature’s God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.

[Snip]
“He” refers to the political elites of both parties:

“Constitution of negative rights” — He has refused his Assent to Laws, the most wholesome and necessary for the public good.
Lawsuits against States — He has forbidden his Governors to pass Laws of immediate and pressing importance, unless suspended in their operation till his Assent should be obtained; and when so suspended, he has utterly neglected to attend to them.
Keystone Pipeline, Drilling, Coal etc — He has refused to pass other Laws for the accommodation of large districts of people, unless those people would relinquish the right of Representation in the Legislature, a right inestimable to them and formidable to tyrants only.
Constant campaigning, bypassing Congress, stonewalling hearings – He has called together legislative bodies at places unusual, uncomfortable, and distant from the depository of their public Records, for the sole purpose of fatiguing them into compliance with his measures.
Recess Appointments / Regulatory Overreach – He has dissolved Representative Houses repeatedly, for opposing with manly firmness his invasions on the rights of the people.
Election Fraud — He has refused for a long time, after such dissolutions, to cause others to be elected; whereby the Legislative powers, incapable of Annihilation, have returned to the People at large for their exercise; the State remaining in the mean time exposed to all the dangers of invasion from without, and convulsions within.
Illegal Immigration — He has endeavoured to prevent the population of these States; for that purpose obstructing the Laws for Naturalization of Foreigners; refusing to pass others to encourage their migrations hither, and raising the conditions of new Appropriations of Lands.
Eric Holder – He has obstructed the Administration of Justice, by refusing his Assent to Laws for establishing Judiciary powers.
Eric holder, NSA — He has made Judges dependent on his Will alone, for the tenure of their offices, and the amount and payment of their salaries.
EPA, IRS, IPAB, NLRB etc — He has erected a multitude of New Offices, and sent hither swarms of Officers to harrass our people, and eat out their substance.
TSA, DHS etc — He has kept among us, in times of peace, Standing Armies without the Consent of our legislatures.
Purging the military ranks — He has affected to render the Military independent of and superior to the Civil power.
Deferring to UN etc — He has combined with others to subject us to a jurisdiction foreign to our constitution, and unacknowledged by our laws; giving his Assent to their Acts of pretended Legislation:
Not yet — For Quartering large bodies of armed troops among us:
Fast & Furious, Ruby Ridge, Waco etc — For protecting them, by a mock Trial, from punishment for any Murders which they should commit on the Inhabitants of these States:
You name it — For cutting off our Trade with all parts of the world:
OboobiCare, NCLB et al — For imposing Taxes on us without our Consent:
NSA Watch lists — For depriving us in many cases, of the benefits of Trial by Jury:
Drone Strikes — For transporting us beyond Seas to be tried for pretended offences
For abolishing the free System of English Laws in a neighbouring Province, establishing therein an Arbitrary government, and enlarging its Boundaries so as to render it at once an example and fit instrument for introducing the same absolute rule into these Colonies:
Fundamental transformation — For taking away our Charters, abolishing our most valuable Laws, and altering fundamentally the Forms of our Governments:
Executive Orders — For suspending our own Legislatures, and declaring themselves invested with power to legislate for us in all cases whatsoever.
Multiple Agencies –He has abdicated Government here, by declaring us out of his Protection and waging War against us.
Multiple Agencies — He has plundered our seas, ravaged our Coasts, burnt our towns, and destroyed the lives of our people.
Amnesty — He is at this time transporting large Armies of foreign Mercenaries to compleat the works of death, desolation and tyranny, already begun with circumstances of Cruelty & perfidy scarcely paralleled in the most barbarous ages, and totally unworthy the Head of a civilized nation.
Americans captive abroad — He has constrained our fellow Citizens taken Captive on the high Seas to bear Arms against their Country, to become the executioners of their friends and Brethren, or to fall themselves by their Hands.
Flash Mobbing, Trayvon, NBPP etc — He has excited domestic insurrections amongst us, and has endeavoured to bring on the inhabitants of our frontiers, the merciless Indian Racist Savages, whose known rule of warfare, is an undistinguished destruction of all ages, sexes and conditions.

In every stage of these Oppressions, We have Petitioned for Redress in the most humble terms: Our repeated Petitions have been answered only by repeated injury. An Tyrantestablishment whose character is thus marked by every act which may define a Tyrant, is unfit to be the ruler of a free people.

Nor have We been wanting in attentions to our Britishestablishment/cronyist brethren. We have warned them from time to time of attempts by their legislature to extend an unwarrantable jurisdiction over us. We have reminded them of the circumstances of our emigration and settlement here. We have appealed to their native justice and magnanimity, and we have conjured them by the ties of our common kindred to disavow these usurpations, which, would inevitably interrupt our connections and correspondence. They too have been deaf to the voice of justice and of consanguinity. We must, therefore, acquiesce in the necessity, which denounces our Separation, and hold them, as we hold the rest of mankind, Enemies in War, in Peace Friends.

A solid point. Our current government has already considerably exceeded the abuses of the British government of the day. The president’s executive orders violate the rule of law worse than the king’s decrees did.

Of course, we can all quibble about what “significant” means in this context, but does anyone believe that it is at all conceivable that there are even ten people in the District who speak only Apache and need to buy their own health insurance? I would bet my entire net wealth that the number is, in fact, lower than that, if not zero.

Why are you talking so much about hundreds of dollars in premium hikes and taxes fees, when the real crush will come when all of those poor Bronze policyholders go in for their heart surgery and are told it will be $12,000 up front because of the deductibles?

And believe me, the hospitals and doctors are going to demand it up front because they know otherwise they will get shafted. With the low fees they can collect they are certainly not going to extend credit.

where’s all the resident Lefty trolls that jump on every DD thread? Nobody should respond to them on any topic until they attempt to justify this. I wonder how many of them have signed up for Ogabecare?

Why are you talking so much about hundreds of dollars in premium hikes and taxes fees, when the real crush will come when all of those poor Bronze policyholders go in for their heart surgery and are told it will be $12,000 up front because of the deductibles?And believe me, the hospitals and doctors are going to demand it up front because they know otherwise they will get shafted. With the low fees they can collect they are certainly not going to extend credit.
NOMOBO on December 26, 2013 at 4:15 PM

Glad I got my bypass out of the way last year – elective . This crap was on my mind and sealed the deal.do it now or do it within the next 3 years if alternatives don’t work out. Did that plus a couple other surgeries. Hopefully nothing else comes up for me in the next few years in the time it takes to undo OboobiCare. If it stays then oh well we’re all screwed after we get over the hill.

Found something out about the Affordable Care Act. Don’t know if I’m right or not but it looks important. I don’t know how to write it up but here goes my best shot at it. A recent study using a made up Healthcare web site showed that if the consumer had as many as 4 choices that they had only a little better chance to pick the best then having one randomly assigned. at 8 choices they had a better chance at a randomly assigned policy. When given to MBA marketing candidates they could handle up to 8 choices.

If the study about choices is correct then one must believe that the average person doesn’t have a chance of picking what is good for them.

The next part of this is to think of a way to determine best value. I looked at the cost of the policy as a net sum zero game. This is the bases of most tort law. One is to neither gain or lose from the action. To do this I just added the total annual premium to the total out of pocket costs to come up with a total net sum zero policy cost.

To make this simpler to compare and in order to generate the information I used a 30 year old single male that has a gross annual income of $19,400.00 a year this is about $3.00/hr above minimum wage for a 37hr work week. Also it is the target group the ACA needs.

I compared the cheapest policy and the most expensive policy with and with out subsidies in the four States. GAI= Gross Annual Income. Bottom= First policy shown. Top= Last policy shown.

Conclusions:
First the data for Virginia is not a miss print that comes from HealthCare.gov.
Second Except for Virginia, in all cases the top plan is of better value then the bottom plan.
Third the Web Site is designed to lead you into buying the bottom plan.

Why:
First the Insurance companies can make more money?
Second the Government can tax more on the policies?

I only used these four states but I think with a few exceptions this will hold true across the board.

Thanks to John Roberts for his need to be considered an A list party goer in the DC party circles. He has single handedly set this Nation on a course of destruction. His convoluted reasons for calling this abomination of a law constitutional will be seen as one of the greatest SC decisions failures of all times.

Odd, that Frum would lie so blatantly. Because you’d think someone so good at lying would easily recognize a fellow liar.

The idea that O-care was EVER “deficit neutral” always relied entirely on the 10 year scoring period when the taxes kicked in during year 1 but the benefits paid didn’t kick in until year 4. In any given year – using the retarded assumptions that this bill would EVER lower costs or not cost 5x as much as projected – the costs were ALWAYS going to exceed the revenue.

I.E. definitively NOT “deficit neutral”. It is shocking that given the horrific unpopularity of a failing law, Frum STILL can’t bring himself to tell the truth.